Easing of margin loan rules lifts Dhaka stocks

Stocks recovered from a three-day losing streak yesterday, helped by the regulator's decision that made margin loans available to investors much earlier than previously.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 39 points, or 0.59 per cent, to close at 6,669.

The index climbed as the Bangladesh Securities and Exchange Commission eased the margin loan rules for the stocks moving from one category to another.

A margin loan allows investors to borrow against the value of securities they already own.

The margin loan is going to be allowed for the shares, except those belonging to the "Z" category, within seven days of the change in their status instead of waiting for 30 days to qualify.

If a stock graduates from the "Z" category, the loans will be available after seven days. Companies whose factory was closed or that can't pay dividend or hold annual general meeting are categorised as the junk or "Z" category stock.

On the DSE, 196 stocks advanced, 142 declined, and 40 remained unchanged. Turnover, an important indicator of the market, dropped nearly 16 per cent to Tk 745 crore.

The upsurge of the overall market amid lower investors' participation than yesterday indicated that the market's recent sell pressure might be over, said International Leasing Securities Ltd, a brokerage house, in its market analysis. 

Prime Insurance topped the gainers' list that rose 10 per cent followed by Bangladesh Shipping Corporation, Atlas Bangladesh, Shepherd Industries, and Bangladesh Building Systems.

Meghna Condensed Milk shed the most, dropping 4 per cent followed by AMCL (Pran), Provati Insurance, Meghna Pet Industries, and Gemini Sea Foods.

Beximco Ltd was the most traded stock on the day with its shares worth Tk 68 crore changing hands. Bangladesh Shipping Corporation, Asia Insurance, Genex Infosys, and Beximco Pharmaceuticals also saw heavy trading.

The Chittagong Stock Exchange also rose. The CASPI, the main index of the bourse in the port city, surged 153 points, or 0.79 per cent, to 19,421.

Of the 299 stocks traded, 156 rose, 105 fell, and 38 did not see any price movement.